Does the incentive to stay in the top divisions in Europe, i.e. EPL, Serie A, Primera Division come from getting a cut of TV rights? Because honestly, if you're a lower division squad but you can sellout the stadium every night, really, what's the difference? And how is the TV money split up? Is it like Champions League where everyone gets a base payout, and the better you do, the more you get on top of the base? Or is it an even payout for everyone?
It does in England. Not sure about everywhere else. Once you get below the Premier league though, the incentive to move up (except to the Premier) is minimal though, IIRC, they pretty much all get the same chunk of the increasingly small pie in the lower divisions of the FA.
TV money is a big part of it. It's generally reckeoned that being relegated costs a team about £20 million. But also you get lower crowds, you generally have to drop your ticket prices, your sponsorship will go down & your best players will want to leave you.
It's a fine balance. The difference in income between the EPL and the First is about 20 million quid. The size of your stadium really makes a difference too. If you have a 30k seater, you'll fill it in the Premiership....but it'll be half full when Grimsby come to town. Where's the money there. You want to be competitive. You get promoted to the top level and you wanna stay there. So, you expand your squad. This costs money. but you've got all this extra TV money. However, you have to lock them into 3 or 4 year deals or they could end up costing you even more (free transfer) but then you get relegated and you have all this top class players with a couple years left on their contract at wages much higher than a First Division club can afford, so you sell them. Wouldn't it be nice if the transfer market hadn't collapsed last summer?
...and you have your yo-yo clubs that can't quite hack it in top flight but still better than most Div 1 clubs. I thought Man City were going to be one of those clubs, but they seem to have found the right balance and now have a new stadium that's going to bring in more revenue. And then you have clubs that are severely hurt by relegation, even crippled because of the loss of revenue. You look at the bottom half of the Div 1 table and see Coventry, Bradford and Derby.
Essentially though it's down to ambition and pride. There are very few clubs outside of the premier league (I'm certain this applies to countries outside England, in fact to a greater extent) who sell out every week. Those that do are only doing so because their teams have the ambition to go up. Most clubs have stadiums with capacities larger than they currently need so they'd be able to cope if they went up. Ambition attracts fans. The (perhaps damaging) effect of this is that clubs spend as much as they think they can afford (and usually more) in an effort to improve the team. The upshot of this is, in Division 2 for example where the average crowd is about 7,500, clubs budget for the 8,500-9,000 crowds a promotion push would bring. Because so many clubs do this, anyone being sensible and budgetting for 7,500 crowds may find they have an inferior team, and may see crowds drop below 6,000 as a result. Also any club that is patently showing no ambition to advance will lose support. Hull City are a good example. They've recently moved into a new 25,000 seat stadium. They play in division 3 where the average crowd is 4,500. They get 15,000. In theory they could just pay average third division players average third division wages and let the money roll in. The problem is that if they did that, and were obviously just doing that, that fans would lose interest and stop coming. Fans are, on the whole, unrealistic (and know it) and are always convinced their club could, and should, be doing better, but if you are getting 15,000 in Div 3 there really is no excuse for not building a promotion chasing side.